Having a home built by a contractor can be a good or a bad experience. When it is bad, it is often very bad. The following story is a synthesis of many true client stories in Washington. I wrote this as part of a newsletter in June of 2001, but I could have written it yesterday.
Once upon a time there was a lovely retired couple who found their dream property on which they decided to build the home they had planned for many years. Every nook and cranny of their retirement home had been meticulously designed. This would be their dream come true. Her kitchen and pantry was perfect, and his garage had built in shelves. Already, they could envision their grandchildren playing in the back yard surrounded by the red, yellow, and purple flowers and luscious green grass and shrubs. In their imaginations, they had the garden planted and the furniture arranged in every room in the house. Excitement was building for the couple who had worked long and hard to save enough to build their dream. All their labor and patience would now pay off, and they would live happily forever in their little home, which they thought might some day be pictured in Home & Garden magazine.
They talked to the grocery store clerk about getting a referral for a good builder. The clerk was unable to help them so they sought a referral from a nice lady also doing her laundry at the local Laundromat. She suggested the yellow pages, which proved to be full of names of builders. Not knowing which one to choose, they picked one with the same last name as their best friends in California. The builder turned out to be very nice and quite knowledgeable. He readily agreed to bid lower than anyone else, and this only proved to the couple that he was in fact also the best builder in the area.
The lovely couple signed a one page agreement entitled “Bid” with their builder and gave him a large check as a down payment. They then went to the bank to arrange a line of credit so the builder could take out his draws as he built the house.
Many months after the home was to be completed and after many “extras” and other cost overruns, which the couple refused to pay, the builder walked off the job even though the house was only 93% complete. The lovely couple were quite frustrated and distraught. Not knowing what else to do, they sought a referral for a good attorney. After paying their new attorney a retainer and agreeing to pay large sums of money each and every month so long as their retirement pension should hold out, they went to live in their unfinished home, although it did not yet have an occupancy permit.
This story is all too often repeated in Washington. Anyone can apply and get a contractor’s license if they pay a small fee and obtain a measly $12,000 bond. There are many excellent builders, but a few who tarnish the industry’s reputation and destroy some people’s dream. The nightmare stories are endless. A Woodinville woman, who wanted a better home for her severely disabled son, said her house was $243,000 over budget. Another couple were presented with an extra bill of $150,000, which they promptly paid because they did not want any conflict. A Longview man said his wife suffered a physical and emotional breakdown. The Washington attorney general’s office said it recorded 9,000 complaints about builders since 1990. In a recent year there were 1,361 complaints, and there is no question that many people do not go through the trouble of filing a complaint with the attorney general’s office.
The problem can grow into the greatest nightmare a couple ever has, and it regularly does. Do not misunderstand the intent of this author. It is not to discourage you from building your dream home. It is not to malign builders, because out of the estimated 44,000 builders in Washington, there are many outstanding builders. My purpose is simply to help you practice a preventive approach, and with a little effort avoid a stressful nightmare.
The nightmare involves a series of traps for the unwary with implications most don’t even consider. Often the home is 90 to 95% complete when the builder walks off the job. The builder is claiming the owner won’t release the last draw from the bank, and so he won’t finish the house until the owner agrees to pay the builder. The owner is claiming the builder has made numerous mistakes in the construction of the house, that the builder has been rude and offensive throughout the process, that he has not paid suppliers and laborers and as a result there are now threats of liens by these suppliers and subcontractors, and that the builder wants $7,000 or $25,000 or $56,000 more because of “extras” which the owner never authorized and the builder never discussed with the owner.
The homeowner next sees an attorney. Letters and phone calls to the builder get nowhere, and a lawsuit is commenced against the builder. The builder has an attorney who files counterclaims against the owner, and the litigation that ensues is both expensive and time consuming, not to mention stressful.
Last Updated on December 8, 2007 by Chuck Marunde
What a nightmare story, my heart goes out to the elderly couple. Any idea what has happened lately with that story?
My heart goes out to them. Unfortunately, this happens all too often. I found referrals from neighbors is usually the best. PLEASE check your State Contractors License Board.
I am 62 years old. My husband 71. I have the same ugly, bitter experience with 2 contractors in the same project: the first one almost got away with the whole retirement nest. I forced him to resign.
I learned a hard lesson and making the discovery by myself I got educated. Never, never sign a contract without verifying City Building Permits. And go for LUMP SUM. Never add any additional item not include on the Blueprints, and request a writing change order before scope of work and specified the price. Approve or reject that change order. No matter what Corrupt Contractors manage to win, and if you know you have a win win case, you would never recover attorney fees and litigation spent. Contact the CSLB, and Attorney General before any Court Case is filed. Otherwise you are lost.
Before signing any contract with a contractor go to the Office of Records or Recording Office and look for the name of the Contractor. Then look for mechanic Liens. If this contractor has Mechanic Liens.. walk away from him. Then go to the Superior Court and look for the Name of the contractor. Ask the Clerk to help you how to find information (it is tricky ) and see how many Court Litigation Cases that Contractor has on record. Never, Never do business with Contractor’s having records: each record is one victim on their list. I Learned my lesson too late.
My elderly parents keep blowing through their savings buying jobs a local contractor is convincing them the need. I’m sure my baby sister is involved as well. 10k here 10k there, ridiculous. Every time I visit something new on a brand new house, that’s how I know they are being talked into it.
If your elderly parents have savings, shouldn’t you be happy they can afford to do what they want? Sounds more like you are jealous. You know they are being talked into things because they are spending money? What a ludicrous statement…………